Crazy investment overcapacity in China LED industry ahead of winter

Capital power driven acceleration, dagankuaishang of the domestic LED industry to advance into the winter.

9 domestic LED listed companies in the upper half of the results show that although revenue grew, but the Maori performance is not satisfactory. In addition to dry photoelectric and Ruifeng photoelectric, other listed companies LED chips or packaging devices, such as the main industry gross margin were significantly reduced. Among them, nationstar and Silan first half net profit fell.

LED winter is coming

A few days ago, REFOND have admitted, in earnings in the last two years, LED enterprises substantial expansion, the entire industry will enter a new stage of opportunities and challenges of A.

REFOND general manager Gong Weibin said yesterday, LED TV the pull force of the rapid weakening of MOCVD (LED chip production equipment) expansion brings overcapacity will result in the next two years, chip prices decline, a decline of 30% to 50%.

The fact that substantial price cuts are taking place. The first half of this year, three growth of 101.6% photovoltaic chip revenue, gross profit margin fell 10.76%; 385% growth Elec-Tech LED package revenue, gross margin fell 8.47%; LED package leading nationstar revenue grew 34%, the overall gross margin was down 9.82%; Silan LED devices, Lehman photoelectric gross margin decreased 13.31% 8.29%.

Gross margin significantly reduced, in Gong Weibin view, but also a sign of winter in the industry. "If the current layout of the MOCVD reached 50%, the real killing will begin. He said.

High tech Industry Research Institute figures show that in January this year, ~7 months, China's MOCVD equipment increased by more than 200 units, is expected in 2012, China's LED chip production capacity will be 10 times in 2010. At present, China's MOCVD equipment has reached 543 units, counted in the construction of the 96 projects, the total number of up to 1642 units.

According to reports, the number of equipment is mainly due to the increase in local government subsidies for equipment and municipal lighting orders. Taiwan Semiconductor Industry Association, said Zhan Yiren, secretary general, many Taiwan enterprises moved to the mainland, but also attracted by this.

Device is one indication of the risk of overcapacity, the material is part of, especially the sapphire. High tech industry research data show that the annual production capacity of the domestic LED sapphire substrate has reached 6 million 850 thousand, there are still under construction in the project, the amount of up to $12 billion 80 million investment. Expansion completed, annual production capacity will rise to 101 million. And in 2011 the global demand for less than 50 million LED sapphire substrate, less than 10 million films, the risk has been very high.

Zhang Xiaofei said that this year the domestic packaging investment has dropped by 20%. Last year more than 90% of the packaging business profits, this year many will face losses. He expects the closure of the closure of the company will reach 10%.

Gong Weibin said, overcapacity has made Korean manufacturers feel alert, they have halted the MOCVD project. The Chinese market is still in the influx of capital, has been listed, is on the market or preparing for the listing of LED, is through the issuance, issuance of corporate debt financing expansion.

Public information, the local LED listed companies with the main industry has 9, has completed the transformation of joint-stock enterprises have hundreds of LED, domestic listed companies involved in the LED industry has 40, the scale of income is only $300 million to $200 million.

3 months ago, the implementation of large LED equipment giant Veeco global second Chief Officer PeELer told the China growth mainly benefited from the transfer of industries, government subsidies as "a pair of illness". He admitted, now to 2015, LED industry will be a big adjustment, "when do not know, but not long".

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